Hells Angels Sue House of McQueen, Saks and Zappos.com Over “Boneheaded” Infringement

The alleged infringing "Hell's Four Finger" Ring marketed by Alexander McQueen Trading Limited.

Someone didn’t do their homework, and it’s going to be a costly and embarrassing lesson.

The Hells Angels Motorcycle Club has sued the Alexander McQueen fashion house for trademark infringement.  The suit was filed October 25, 2010 in U.S. District Court in Los Angeles.  The club also named the Saks retail chain and Internet retailer Zappos.com as defendants for their roles in selling the allegedly infringing products. 

In its complaint, the Hells Angels club requests findings that the defendants infringed its trademarks and committed unfair competition and trademark dilution.  The club seeks an injunction preventing additional sales of the alleged infringing products as well as a recall of the alleged infringing inventory.  The Hells Angels ask that the inventory be delivered to a third party for destruction.  Finally, the club seeks money damages which it asks be multiplied because of the blatant and “exemplary” nature of the infringement, along with the club’s attorney fees for the action.

The alleged infringing "Hell's Knuckle Duster" Clutch marketed by Alexander McQueen Trading Limited.

The motorcycle club claims that Alexander McQueen Trading Limited, the fashion house founded by designer Alexander McQueen (who committed suicide earlier this year), infringed its winged skull design mark by using it in a multi-finger “Hell’s Four Finger” ring and “Hell’s Knuckle Duster” clutch handbag (see pictures.)  The suit also claims that the defendants infringed by marketing a jacquard dress and a pashmina scarf using the word mark HELLS ANGELS, without authorization by the club.

The Hells Angels club registered a winged skull design (which the club calls the “HAMC Death Head design”) in 2009 as U.S. Trademark Registration No. 3666916 for goods including “jewelry, jewelry pins, clocks and watches, earrings, key rings made of precious metal, badges made of precious metal, and chains made of precious metal.”  An image of the registered design appears at right, below.  In its complaint, the club claims use of the design since 1948.

An image of the "HAMC Death Head design" mark registered for various goods, including jewelry, by the Hells Angels Motorcycle Club.

The same design is registered separately (U.S. Reg. No. 3311550, issued in 2007) for “clocks; pins being jewelry; rings being jewelry.” In that registration the Hells Angels claim use of the mark on those goods since 1966.

What Happened Here?

This is, by all appearances, a tremendous blunder by Alexander McQueen Trading Limited, as well as Saks and Zappos.com.  You’re welcome to judge for yourself, of course, but to this observer the designs used by the defendants unquestionably are confusingly similar with the design registered by the Hells Angels.  The use of the words “HELL’S” and “HELL’S ANGELS” merely completed the effect, making it a virtual certainty that consumers would perceive some connection with the infamous motorcycle club.

Here, boys and girls, we have a perfect example of why marketers should always consult an experienced trademark practitioner well in advance of introducing a new product line.  It frankly seems hard to believe that marketers as savvy as those at the House of McQueen, Saks and Zappos.com could have failed to recognize the potential trademark implications of their actions here.  Perhaps they did. 

In any event, it’s highly unlikely that these product ideas would have survived a review by an attorney experienced in trademark law.  Right about now, it probably seems to the good people at the House of McQueen, Saks and Zappos that a review by their trademark attorneys would have been money well spent.

RING AND HANDBAG IMAGES COURTESY OF STYLITE.COM.

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How to Choose Your New Brand – Part 11

Choosing a new brand name is not as simple as “Do I like it? Okay, let’s go with it!”  Whether it is to be your flagship brand or just a new product or service in your line, there are many factors to consider in choosing a new brand name.  In this post and the others in this series, I walk you through the most important of those steps.

My earlier posts in this series discussed the importance of getting good legal advice, of understanding the function of trademarks, and of deciding whether your marketing plans require exclusivity on the name.   I also have discussed the strategic value of coming up with a list of potential name candidates and of having your name candidates consumer tested and searched for potential conflicts.

My more recent posts discussed the value of filing trademark applications and registering appropriate domain names to reserve your narrowed list of name candidates.  The most recent installment discussed two steps: brand rollout and monitoring the marketplace for infringements.

We now come to the final step on my list: maintaining your trademark and domain name registrations, so that they do not expire or get cancelled. 

Failing to plan ahead for renewals is asking for disaster.

Step 11:  Maintain and Renew Registrations For Your Name

If you have gone to the cost and effort to stake out trademark and domain name registrations for your brand name, it only makes sense that you will want to keep them in place.  These registrations provide you with important safeguards against encroachment by competitors.  You should make concrete plans now, at the time of brand rollout, to take the necessary maintenance steps. 

Trademark Renewal

Unlike some other types of intellectual property protection, trademark rights can last forever provided you make continuous use of your marks and enforce them against infringers.  Trademark registrations also can be perpetual, but you must take the necessary steps to keep those registrations in force.

If you want to keep your U.S. Trademark Registration alive, you must make periodic filings with the USPTO to prove that the mark in question is still in use (and still used in the same form as it was registered.)  If you don’t make these filings, depending on the point in your registration’s life, it will be cancelled automatically or simply expire.  Your trademark practitioner can assist you in making the necessary filings on a timely basis, but ultimately it’s up to you to make certain the mark remains in ongoing use and that the registration is maintained.

Cancellation or expiration of your trademark registration doesn’t mean you lose all rights in your mark.  If the mark has been in continuous use on your product and remains in use, you still will have common law rights.  But the protections you can leverage using common law rights are far inferior to those provided by a U.S. Trademark Registration.  If the U.S. Registration for your mark expires or is cancelled, my best advice is to file a new application to register the mark as soon as possible. 

Domain Name Renewal

As with trademarks, domain name registrations cover a fixed period of time and will eventually “die” if you fail to renew them.  (One important difference is that with domain names, you can determine the length of your registration and pay registration fees accordingly; with trademarks the maintenance and renewal periods are fixed and uniform.)

If you build your brand into a valuable commodity, then the corresponding domain name will be an equally valuable piece of property.  You can bet there will be opportunistic parties waiting around for you to fall asleep at the switch and let your valuable domain registration die.  Indeed, there is an entire industry built around “snatching” expired domain names. 

Make certain SOMEBODY in your organization stays alert to upcoming renewal and maintenance deadlines.

Your Assets, Your Responsibility

You should create within your brand organization a job function responsible for calendaring, tracking and renewing trademark and domain name registrations.  Because these events often take place years in the future, this responsibility should be bestowed on a particular job title, not a particular person.  Individual people may come and go, but job titles (and their responsibilities) remain.

You can in many cases outsource these responsibilities, but I recommend keeping your own calendar of upcoming renewals as well.  Bear in mind that if someone else fails to take the necessary actions, you are the one who will feel the loss of rights.  Any law suit you could bring against your failed “watchman” would be small comfort – money damages are a poor substitute for the value of your lost rights.  Ultimately, these are your assets and you should assume ultimate responsibility for keeping them safely registered.

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Cybersquatting, Part 3: The UDRP Alternative

My previous two articles in this series have dealt with proceedings by trademark owners against cybersquatters under the Anticybersquatting Consumer Protection Act, or “ACPA.”  The ACPA has been inserted into the Lanham Act, the U.S. federal trademark statute.  As a result, successful plaintiffs under the ACPA can select from a range of remedies available under the Lanham Act. 

Lanham Act remedies, however, often are not the most efficient way to combat cybersquatting.  As a result, we now will discuss an alternate approach offered by the Internet Corporation for Assigned Names and Numbers, or “ICANN.”

Take advantage of the UDRP alternative and you'll be "master of your domain" again in no time. Wait, what?

UDRP Alternative

ICANN is the organization that governs the assignment of domain names by the individual registrars.  ICANN offers what often is a less expensive and more efficient – if narrower – remedy against cybersquatters.  This approach is called the Uniform Domain-Name Dispute-Resolution Policy, or “UDRP.” 

The current rules governing UDRP proceedings are published at the ICANN site.  A new set of rules have been approved and will take effect for UDRP proceedings filed on or after March 1, 2010. 

The UDRP currently applies to all .com, .net, .org, .biz, .info, .coop, .museum, .coop, .aero and .name top-level domains, and some country code top-level domains.  No one can register any domain name under one of these top-level domains, regardless of the registrar, without agreeing to be bound by the UDRP.

UDRP procedures provide disputants with a cheaper and quicker arbitration proceeding rather than a court proceeding.  Under the UDRP policy, the domain name registrar (not the cybersquatter) is required to transfer the domain name to the trademark owner, if the complaining trademark owner prevails.

UDRP Procedures

UDRP cases are heard by arbitration panels supplied by UDRP “providers,” organizations approved by ICANN for that purpose.  The complaining trademark owner selects the provider. 

The arbitration panel can include one or three members – unless one of the parties requests a three-member panel, the panel will comprise only one member.  A three-member panel is more expensive, but may be worth the cost as the parties get to have a say in the members of a three-member panel.

In order to prevail, the complaining trademark owner must demonstrate these facts:

1) The complainant has established trademark rights in the claimed mark;

2) The domain name is identical or so similar to the complainant’s trademark as to cause confusion;

3) The alleged cybersquatter has no legitimate interest in the domain name, and

4) The alleged cybersquatter registered the domain name in “bad faith.”

In a UDRP proceeding, a panel will consider several non-exclusive factors to assess bad faith, such as:

a)  Whether the domain name owner registered the domain primarily for the purpose of selling, renting, or otherwise transferring it to the complaining trademark owner;

b)  Whether the domain name owner registered the domain name to prevent the trademark owner from using the mark in a corresponding domain name, if the domain owner has engaged in a pattern of such conduct; and

c)  Whether the domain name owner registered the domain primarily for the purpose of disrupting the business of a competitor; or

d)  Whether by using the domain name, the domain owner has intentionally attempted to attract, for commercial gain, internet users to the registrant’s website, by creating a likelihood of confusion with the trademark owner’s mark.

Results and Remedies

The UDRP need not be the final stop for the complaining trademark owner.  If he is unsuccessful in his UDRP arbitration, he is not precluded from bringing a federal law suit against the alleged cybersquatter under the ACPA. 

On the other hand, if the alleged cybersquatter loses in the UDRP proceeding, she has ten days to bring suit if she wants to prevent the domain name registrar from transferring the domain name.  Upon receiving notice that the losing domain name holder has filed suit, the registrar will take no further action until it receives notice that the suit was settled or decided.

The UDRP provides a quick and effective remedy against cybersquatters, with decisions generally rendered within about two months.  One limitation of the UDRP approach is that it does not provide for monetary damages, attorneys fees or costs – only the transfer or cancellation of the domain name registration.  In many cases, however, that may be the most important remedy for the trademark owner. 

In any event, many trademark owners prefer to invoke the UDRP procedure, which usually is significantly less expensive than a federal law suit under the ACPA.

PHOTO COURTESY OF FLICKR USER LANUIOP, UNDER THIS CREATIVE COMMONS LICENSE.

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What is Cybersquatting, and What Can I Do If I’ve Been Targeted? (Part 1)

So, you’re ready to take your business onto the Internet, and the most sensible way to do that is to register your well-known trademark as a domain name.  You try to do so, but learn that another party already has registered your trademark as a domain name.  Your brand may have been cybersquatted.  What are your options?

By the time you see the flags, it may be too late - cyberpirates have already made off with your valuable trademark.

“Cybersquatting” is a term that was coined to describe the bad faith registration and use of another party’s trademark as a domain name, with the intent to profit somehow from the good will of that trademark.  The term harkens back to the practice of illegal tenants “squatting” in derelict or condemned buildings.

A party injured by cybersquatting can sue under the Anticybersquatting Consumer Protection Act, or ACPA.  The ACPA became a part of the U.S. trademark statute, also known as the Lanham Act.

(I should point out here that trademark owners injured by cybersquatting also can proceed through arbitration under what are called the Uniform Domain-Name Dispute-Resolution Policy, commonly referred to as the “UDRP” approach.  I will be discussing the UDRP approach in an upcoming related article.  This approach can be quicker and significantly less expensive than proceeding under the ACPA, though it also offers a narrower range of remedies.)

The ACPA defines cybersquatting (which the statute refers to as “cyberpiracy”) as “registering, trafficking in, or using” a domain name that is identical or confusingly similar to another party’s distinctive trademark, “with a bad faith intent to profit from that mark.”  If the complaining party’s trademark is deemed a “famous” mark under the law, cybersquatting also occurs where the domain name would “dilute” the famous mark by tarnishing or blurring the public’s perception it.

Bear in mind that the domain name used by the cybersquatter need not be (and in fact, often is not) identical to the trademark at issue.  One practice that domain pirates quickly adopted is “typosquatting,” which involves registering common misspellings of a trademark as domain names.  When an unwary web-user accidentally types the misspelled trademark, he or she is taken to the pirate’s site.  The ACPA is broad enough to cover this practice, provided it can be shown that the misspelled domain name is confusingly similar to the plaintiff’s trademark.

The ACPA’s definition of cybersquatting creates several issues of proof for the would-be plaintiff, which I will discuss in an upcoming article.  For now, let’s examine the remedies that the ACPA provides for those injured by cybersquatting.

If a violation of the ACPA is found, the court can order the forfeiture or cancellation of the offending domain name, or its transfer to the trademark owner. The trademark owner also can recover up to three times his or her actual damages.  Actual damages include any profits the cybersquatter made through his use of the domain, along with any losses sustained by the trademark owner through the cybersquatters activities (such as lost sales or harm to the mark’s reputation.)

The trademark owner also has the option of foregoing actual damages and instead taking statutory damages (similar in nature to the copyright statutory damages I discussed in an earlier post) in the amount of $1,000 to $100,000 per domain name.  The statutory damages amount is left to the court’s discretion – presumably, the more odious the cybersquatter’s actions, the higher the award.

Finally, in suitable cases a successful plaintiff can get an injunction prohibiting further cybersquatting by the defendant, and in “exceptional cases,” can also recover attorney’s fees from the cybersquatter.

Where the cybersquatter is offshore and therefore not subject to the jurisdiction of U.S. courts, a provision of the ACPA allows the injured party to proceed “in rem,” or directly against the domain name itself.  In these cases the only remedy is that the domain will be awarded to the plaintiff.

If your trademark has been cybersquatted, the ACPA provides a range of legal options you can use against against the pirate.  My next article will discuss what your law suit must show, in order to get an award of the remedies provided by the ACPA.  Another related upcoming article will discuss the UDRP approach and evaluate the respective benefits of ACPA vs. UDRP.  Stay tuned for more discussion!

PHOTO COURTESY OF FLICKR USER REITVELD, UNDER THIS CREATIVE COMMONS LICENSE.

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How Is Trademark Infringement Decided?

 My last post discussed the issue of brand proximity, by which I mean the co-existence of other identical or similar brand names for other goods or services.  I mentioned that it is not necessary that there be no other users of your name whatsoever.  Rather, there should be no other users of the mark for goods or services so similar to your own that consumers will believe there is a connection between the two products – either that they are made by the same company, or that there is some other connection such as licensing or approval of one use by the other user.

Don't be misled - in real life, she takes off the blindfold and examines your mark and your motives.

This (mistaken) belief that some connection exists between two trademarks is the key to a court’s determination of the issue of trademark infringement.  If the two trademark uses at issue are similar enough that it is reasonably likely that consumers will make such a mistake (a circumstance that is called “a likelihood of consumer confusion” in trademark jargon), then the court will find trademark infringement.  In that case, the court almost always will issue an injunction, ordering the later (or “junior”) trademark user to stop using its mark.  In some cases, the court also will order the infringing later user to pay damages to the earlier (or “senior”) user.

How does the court make this determination?  Does it try to project itself into the minds of the public?  Of course, judges cannot read the minds of the purchasing public and formulate a collective viewpoint.   Instead, the judge considers a list of factors formulated by courts in prior decisions.  The list of factors may vary slightly depending on which U.S. Circuit Court of Appeals rendered the decision applicable in your area, but the similarities greatly outnumber the minor differences.

Generally, the court will consider these factors:

Ÿ  the strength of the senior user’s mark (if the plaintiff’s mark is generic, highly descriptive, or widely used by unrelated parties, the law suit will fail);

Ÿ  the similarity of the marks themselves (often the uses are not identical – so how similar are they?);

Ÿ  the similarity of the respective goods and the trade channels through which they are advertised and sold (e.g., are both products sold through sporting goods stores?);

Ÿ  whether consumers have evidenced any actual confusion between the two uses (“Dear Sony – I bought your SONNY brand HDTV and it’s a piece of junk!  I’ll never buy anything from you again!”); and

Ÿ  what level of care the public is likely to use in buying such goods (generally speaking, cheap goods = little care, while expensive goods = greater care.) 

For obvious reasons, the court will first satisfy itself that the plaintiff’s mark is strong.  The next thing the judge will assess is the degree of similarity of the marks and the goods or services.  If they are not reasonably similar, the court will not look any further. 

Beyond these initial considerations, the most decisive of these factors probably is that of whether any actual consumer confusion has occurred.  Since the test for infringement is whether a likelihood of consumer confusion exists, a court obviously will not need to see much actual confusion before deciding that such a likelihood exists.

Another “super factor” that the court may consider is the defendant/junior user’s intention in selecting the mark.  If the evidence suggests that the defendant chose the mark with the intention that confusion occur (to provide a competitive boost, for instance, by riding on the plaintiff’s brand good will), then in some jurisdictions the court will go as far as to assume that the junior user succeeded in that effort, and find infringement.

Of course, other factors may come into play, and these factors are all indirect ways for the judge to assess the likely consumer reaction to the two brands at issue.  Usually, attorneys on both sides of the law suit will also conduct consumer surveys to try to get a direct read on purchaser understanding.  If properly conducted to avoid leading those surveyed, these surveys can be a potent tool in proving or disproving infringement.

PHOTO COURTESY OF FLICKR USER MIRA66, UNDER THIS CREATIVE COMMONS LICENSE.

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Expect More. Pay Damages?

For the first substantive post here, I thought I would honor the obsessions interests of certain unnamed family members and report on a current ruckus in the designer bag industry.  The story here is that mega-retailer Target Corporation has been sued for trademark infringement by Coach Inc., the marketer of costly prestigious COACH® brand handbags and personal accessories. 

Coach brought its suit in federal district court in the Southern District of New York, where the company is headquartered.  The complaint asserts that this summer, mass merchandiser Target began selling bags which are “exact and/or confusingly similar reproductions of Coach’s Ergo designs and Signature Patchwork designs.”  

Coach’s Ergo bags apparently are designed to be ergonomically correct (sidebar: good luck protecting that mark), while the Signature Patchwork (ditto) bags are pieced together using patches of different fabrics.  Coach has, not surprisingly, asked the district court to issue an injunction preventing Target from selling the bags.  It also seeks undetermined damages and attorney fees.

Coach’s Ergo bags look like this:

This bag also happens to feature one iteration of the Signature Patchwork design. 

My online review of Target’s handbag line turned up any number of fabulous bags, but nothing that looked to this reporter like an “exact and/or confusingly similar reproduction” of the Coach handbag.  Of course, Target very likely pulled the bag(s) in question once the suit was filed.

Since I don’t have a picture of Target’s bag to give you, the least I can provide is an image of the company’s famous logo:

Presumably, Target Corporation didn’t consider the “vexatious litigation” angle when selecting its brand name and logo.

For those keeping track, the two companies have a history of friction, and this is not the first time Coach has sued Target for infringement.  Coach filed suit in 2006, claiming that Target sold counterfeits of Coach’s Python Signature Striped Demi purse.  Coach dismissed the suit after only three weeks when it came to light that the bags in question were legit Coach bags purchased by Target “at a major department store liquidation sale.”  Coach also currently has a suit pending against Brown Shoe Company for infringement of the Ergo and Signature Patchworks bags.

Coach maintains a page on its website as well as a telephone hotline, both devoted to reporting COACH counterfeits.  The web page points out that “counterfeit quality is typically poor,” and goes on to intone that COACH counterfeiters “illegally profit at the expense of Coach and affect the entire economy through lost revenues and taxes.”  Frankly, I had no idea that the luxury handbag market was such a dominant force in our national economy.

I have not seen the actual complaint as yet, and thus have no basis to provide my own vaunted SOLID GOLD™  analysis of whether Target’s bags infringe.  Stay tuned for further comment when I have more information.

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